United States Court of Appeals
                                                                   Fifth Circuit
                                                                 F I L E D
                          Revised May 28, 2003
                                                                  May 19, 2003
              IN THE UNITED STATES COURT OF APPEALS
                                                            Charles R. Fulbruge III
                          FOR THE FIFTH CIRCUIT                     Clerk

                          ___________________

                              No. 01-11392

                          ___________________



     LEASEHOLD EXPENSE RECOVERY, INC.,

                                         Plaintiff-Appellant,

                     v.

     MOTHERS WORK, INC.; MOTHERS Work (RE) INC.,

                                         Defendants-Appellees.

         _________________________________________________

           Appeal from the United States District Court
                 for the Northern District of Texas
         _________________________________________________


Before BENAVIDES and DENNIS, Circuit Judges, and WALTER*,
District Judge.

BENAVIDES, Circuit Judge:

     This appeal concerns the interpretation of a contingency fee

contract under Texas law.     The appellant claims that the district

court erred in entering judgment for the appellees on its breach

of contract claims, conspiracy claim, and claim for recovery in

quantum meruit.

     *
      District Judge of the Western District of Louisiana,
sitting by designation.

                                   -1-
                           I.   Background

     Appellant Leasehold Expense Recovery, Inc. (“LER”) is in the

business of reviewing retail leases for overcharges.     Appellees

Mothers Work, Inc. and Mothers Work (R.E.) Inc. (collectively

“Mothers”) sell maternity clothing from retail stores operating

from shopping malls throughout the country.     On March 15, 1994,

LER entered into a Contingent Fee Contract (the “Contract”) with

A Pea in the Pod (“APIP”), which thereafter merged with Mothers,

who assumed APIP’s rights and responsibilities under the

Contract.   Under the Contract drafted by LER, LER agreed to

review sixty-three of APIP’s leases with shopping malls to

determine whether landlords were overcharging for rent and

operating expenses.    The Contract authorized LER to negotiate and

collect upon a settlement regarding overcharges with each

landlord, within certain limitations, and described the terms of

LER’s compensation.    The Contract also included a provision

regarding termination.

     In 1994, LER reviewed twenty-one leases and found more than

$500,000 in potential overcharges. Mothers eventually authorized

LER to proceed with thirteen of the twenty-one audits.     From 1996

to 1997, LER contacted landlords and attempted to recoup alleged

overcharges on behalf of Mothers.      However, all thirteen of the

landlords refused to deal with LER without an authorization

letter from Mothers.    LER maintains that although Mothers

repeatedly promised that such authorizations would be

                                 -2-
forthcoming, they were never provided.    LER believes that Mothers

used the knowledge of past overcharges to negotiate new, more

favorable leases with its landlords on its own.    Mothers refused

to pay LER for its work, on the grounds that LER was not entitled

to compensation under the terms of the Contract.

     On January 10, 2000, LER sued Mothers in Texas state court

for breach of contract, fraud, negligence, grossly negligent

misrepresentation, and conspiracy.     Mothers removed the claim to

federal court, which has diversity jurisdiction.    Mothers moved

for summary judgment as to all of LER’s causes of action.    The

magistrate judge prepared a report and order on April 27, 2001,

recommending that the motion be granted in part and denied in

part.   The magistrate judge recommended that summary judgment be

denied only with respect to LER’s breach of contract claims

concerning three stores.    On July 26, 2001, the district court

adopted the magistrate judge’s report and recommendations in

full.   On August 20, 2001, the district court rejected LER’s

motion to reconsider the July 27, 2001 Order.    Following a short

bench trial on LER’s remaining claims, the district court awarded

Mothers judgment as a matter of law, save a $9,074.46 award

concerning an amount that was uncontested.

                      II.   Standard of Review

     This court reviews a district court’s grant of summary

judgment de novo. Rivers v. Cent. and S. W. Corp., 

,


                                 -3-
682 (5th Cir. 1999).    Summary judgment is appropriate, when,

viewing the evidence in the light most favorable to the nonmoving

party, the record reflects that no genuine issue of any material

fact exists. Celotex Corp. v. Catrett, 

, 322-324,

(1986); Sulzer Carbomedics, 

.      See also

Transitional Learning Cmty. at Galveston, Inc. v. U.S. Office of

Pers. Mgmt., 

, 429 (5th Cir. 2000).      A material fact

is one that “might affect the outcome of the suit under the

governing law” and a “dispute about a material fact is

‘genuine’...if the evidence is such that a reasonable jury could

return a verdict for the nonmoving party.”      Sulzer Carbomedics,

(quoting Anderson v. Liberty Lobby, Inc.,

, 248 (1986)).

     Challenges to the district court’s determinations of fact

following a bench trial are reviewed for clear error, and

conclusions of law are reviewed de novo.      Kona Tech. Corp. v. S.

Pac. Transp. Co., 

, 601 (5th Cir. 2000).      Since this

case comes to the court through diversity jurisdiction, the

substantive law of Texas applies.      Id.; See Erie R.R. v.

Tompkins, 

, 78-79 (1938).

                 III.    Breach of Contract Claims

     “Under Texas law, the interpretation of an unambiguous

contract, as well as the determination of whether or not a


                                 -4-
contract is ambiguous, is a legal question.”     Steuber Co. v.

Hercules Inc., 

, 1098 (5th Cir. 1981).     If the

contract terms are susceptible to only one reasonable

construction, the contract is unambiguous and will be enforced as

written.   Guaranty Nat. Ins. Co. v. Azrock Industries Inc., 

, 243 (5th Cir. 2000).

     In contract disputes, the court’s primary concern is to give

effect to the written expression of the parties’ intent.     Nat’l

Union Fire Ins. Co. v. Care Flight Air Ambulance Service, Inc.,

, 328-39 (5th Cir. 1994).     In doing so, the court

reads all parts of the contract together to ascertain the

agreement of the parties, ensuring that each provision of the

contract is given effect.      

Kona Tech. 

; Sulzer Carbomedics, Inc., 

(5th Cir. 2001).

A.   Under the Contract, is LER entitled to compensation for
     overcharges discovered, but not recovered?

     1.    Substantive Claim

     LER contends that, by the plain terms of the Contract, the

district court erred in granting summary judgment to Mothers

regarding eighteen stores, and judgment as a matter of law

following a bench trial regarding three stores, with respect to

overpaid charges that it discovered regarding all of the twenty-

one stores.   LER contends that the plain terms of the Contract

entitle it to compensation for discovered overcharges, regardless

                                   -5-
of whether Mothers actually recovered any of the overpayments.

Mothers responds that the district court properly held that the

Contract unambiguously assigns LER a 50% interest only in those

overpaid charges that are actually recovered.   Two sections of

the Contract are particularly relevant to this dispute:

     Article 1, Section 1.2, FEES. In consideration of the
     services rendered and to be rendered to the Client by LER,
     the Client does hereby assign, transfer and convey to LER as
     compensation herein, a fifty percent (50%) undivided
     interest in all overpaid Charges relating to each and every
     lease, including any other amounts recovered relating
     thereto, that:

          (a)   are actually recovered in cash, check or the like
                by Client;
          (b)   are recovered in the form of a credit to Client’s
                account with any landlord pursuant to any lease;
                and,
          (c)   are otherwise recovered by Client.

     All compensation herein as stated in Sections 1.2(a) through
     1.2(c) shall herein together constitute “LER Fees.” LER
     Fees shall be paid to LER by Client within ten (10) days of
     Client’s receipt of overpaid Charges on any lease, or the
     credit thereof.
     ...
     Article 2, Section 2.1, TERMINATION. LER or Client may
     terminate this Agreement upon fifteen (15) days prior
     written notice by delivering said notice to Client. Said
     termination shall not affect the right of LER to collect LER
     Fees for any overpaid Charges either discovered or recovered
     as of the date of termination of this Agreement. Under all
     circumstances LER’s right to collect LER Fees shall survive
     the expiration or termination of this Agreement.

     The terms of the Contract unambiguously entitle LER to

compensation only for those overpayments discovered by LER that


                                -6-
Mothers actually recovers.   While Article 1, Section 1.2

(hereinafter “Compensation Provision”) states that LER is

entitled to a fifty percent interest in all overpaid Charges,

that right is subject to the satisfaction of subsections (a),

(b), or (c), each of which require the Charges to be “recovered.”

We find without merit LER’s contention that the three subsections

were intended to relate solely to the phrase “including any other

amounts recovered relating thereto,” particularly given the

placement of a comma (inserted by LER itself, as the drafter),

following the word “thereto.”    The presence of the comma

indicates that both the phrase “including any other amounts

recovered relating thereto” and the earlier phrase “all overpaid

Charges relating to each and every lease” are subject to the

condition of recovery noted in subsections (a), (b) and (c).

     Nor does Article II, Section 2.1 (hereinafter “Termination

Provision”), support LER’s argument that it is entitled to

compensation for charges that Mothers has not recovered.      The

Termination Provision was clearly intended to preserve LER’s

right to compensation as described in the Compensation Provision,

as reflected by its use of the term “LER Fees.”    The Compensation

Provision unambiguously requires that Mothers actually recover on

the discovered overpayments.    By implication, the parties

intended the Termination Provision to protect LER’s right to

compensation upon termination to the same degree.    The phrase


                                 -7-
“discovered or recovered” in the Termination Provision was merely

intended to protect LER’s entitlement to compensation for

overpaid charges that it discovered before termination, but were

not recovered until after termination.   LER’s proposed

interpretation of the Termination Provision, which would entitle

it to compensation upon termination for overcharges merely

discovered or recovered, is not only contrary to the plain

meaning of the Contract, but would create a perverse incentive

for LER to prematurely terminate the contract in order to avoid

the recovery requirement under the Compensation Provision.    The

district court properly granted Mothers judgment on this issue.1

     2.   Procedural Claim

     LER contends that the district court’s decision to enter

summary judgment on its breach of contract claims regarding

eighteen stores was based on improperly considered evidence.    The

magistrate judge struck the appendix that Mothers attached to its

reply brief to LER’s response to Mothers’s motion for summary

judgment as an impermissible attempt to introduce new evidence at

the reply stage.   The magistrate judge also struck the

Declaration of Eric Stahl for failure to include a date, as

required by 28 U.S.C. § 1746. LER argues that the district court


     1
      Our resolution of this issue renders LER’s contention that
the district court erred in refusing to entertain its assertion
that the Contract was terminated by operation of a letter dated
August 9, 2001, moot.

                                -8-
improperly relied upon this excluded evidence in granting summary

judgment for Mothers.

     LER’s assertion is groundless.   Following the district

court’s grant of summary judgment, LER, by motion, asked the

district court to reconsider its judgment on the grounds that the

district court had improperly taken into account the excluded

evidence.   Judge Solis, in denying the motion, stated that his

decision did not implicitly or explicitly rely upon the excluded

appendix or affidavit, and reemphasized that with or without the

excluded evidence, LER failed to demonstrate genuine issues of

material fact that any savings on the stores in question met the

criteria for recovery set out in the Contract.   Given this

unequivocal denial and the ample support in the record for his

conclusion in the absence of the excluded evidence, we see no

reason to further question Judge Solis’s ability to properly

consider evidence.

B.   Under the Contract, Is LER entitled to compensation for
     future savings?

     LER argued at trial that it was entitled under the Contract

to be compensated for prospective overcharges that its efforts

enabled Mothers to avoid in relation to three of its stores.

LER’s argument is premised upon a portion of the Compensation

Provision, specifically Article 1, Section 1.2(c), which entitles

LER to a fifty percent interest in “all overpaid Charges relating


                                -9-
to each and every lease, including any other amounts recovered

relating thereto, that:...(c) are otherwise recovered by Client.”

LER contends that this language can reasonably be interpreted as

entitling LER to compensation for future overcharges that its

efforts prevented.   LER contends that the district court’s

determination that the Contract unambiguously did not provide for

compensation for such savings was erroneous, and parol evidence

should not have been permitted to clear up the ambiguity in the

Contract.

     Mothers argued, and the district court agreed, that the

Compensation Provision entitles LER to recover only when two

things occur: (1) Mothers actually overpaid a charge to the

landlord; and (2) the overpaid charge was recovered.    We agree

that this the only reasonable interpretation of the Contract.

     “[A] contract is ambiguous only when the application of the

applicable rules of interpretation to the instrument leave it

genuinely uncertain which one of the two meanings is the proper

meaning...”.   R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc.,

, 519 (Tex. 1980).      While LER concedes that the

phrase “overpaid Charges” does not encompass future savings on

rent or other charges, it contends that future savings are

nonetheless recoverable as “other amounts relating thereto.”

Such an interpretation, however, ignores the requirement of

subsections (a),(b), and (c), all of which require “other


                               -10-
amounts” to be recovered.   A landlord’s decision to charge

Mothers the proper amount of rent in the future does not

constitute a “recovery” for prior overcharges paid.    If a

landlord were to give Mothers a discount on the proper amount of

rent, or provide free utilities for a year as repayment for the

prior overcharges, this would constitute a recovery, and LER

would be entitled to 50% of the value of the discount.

     The Contract simply does not contemplate the situation where

Mothers may be unable to recover past overpayments, but benefits

from LER’s work nonetheless in the sense that it does not overpay

in the future.   “The failure to include more express language of

the parties’ intent does not create an ambiguity when only one

reasonable interpretation exists.     Columbia Gas Transmission

Corp. V. New Ulm Gas, Ltd., 

, 591 (Tex. 1996). Nor

is parol evidence of the parties’ intent permitted to create an

ambiguity.   Constitution State Ins. Co. v. Iso-Tex Inc. 

, 408 (5th Cir. 1995).   Read as a whole, the Compensation

Provision clearly entitles LER to compensation only for charges

that Mothers overpaid and actually recovered.    This is the only

reasonable interpretation of the Contract, as the district court

correctly found.

C.   Did Mothers breach the Contract by settling overcharges with
     the landlords without the knowledge of LER?




                               -11-
     LER contends that with respect to eight2 store locations

where overcharges were discovered, Mothers engaged in secret

“side deals” with each landlord by executing lease amendments by

which it recovered the overcharges in the form of credits and

lower future rents.   LER alleges that Mothers engaged in these

quid pro quo settlements in explicit violation of Article I,

Section 1.1 which bars settlements in the absence of LER’s

consent, in an attempt to avoid compensating LER under the

Contract.

     Mothers does not dispute that if it had entered into the

settlements alleged by LER, it would indeed have breached the

Contract.   However, it contends, and we agree, that in order to

prove that a lease amendment was executed as a form of quid pro

quo transaction, LER needs to demonstrate two things:   (1) that

the new lease terms were more favorable to Mothers than the

previous terms; and (2) that the new, more favorable terms were

obtained in exchange for the release of an Overcharge Claim.    In

other words, LER, to prevail on any one of its eight quid pro quo

claims, needs demonstrate that Mothers successfully used

knowledge of overcharges, obtained as a result of LER’s efforts,


     2
      One of the stores cited by LER, as Mothers points out, was
not subject to the Contract. The Albany (Crossgates) store was
not included in the addendum to the Contract, which listed the
stores whose leases LER was granted authority to review. There
was therefore no possible breach of contract regarding any lease
alterations to this store location.

                               -12-
as leverage to negotiate improved lease terms with a landlord.

     LER’s evidence on appeal suffers from the same defect as

that noted by the magistrate judge:

          With respect to most of these leases, LER has done
          nothing more than include the amendments in its
          appendix. There is no evidence that the terms of the
          amendments are more favorable to Mothers Work than
          those of the prior leases. The court is neither
          required nor inclined to come [sic] through LER’s 687
          page appendix in search of evidence to support these
          claims.

     Though equally disinclined to comb through the disorganized

and ill explained documents provided by LER, a thorough review of

the record reveals that the evidence submitted regarding the

stores located in Beverly Hills, California, Pasadena,

California, Palo Alto, California, Dallas, Texas, Buffalo, New

York, and Syracuse, New York, do not create an issue of material

fact regarding whether the amended terms are more favorable to

Mothers than those that preceded them.   We are simply not

provided with any standard of comparison that would allow us to

determine that the above mentioned leases were either modified or

terminated to Mothers’s benefit.

     Moreover, we are unable to link any benefits that Mothers

may have gained through modifications or terminations to any of

the leases to a promise on the part of Mothers to relinquish an

Overcharge Claim discovered by LER.   LER’s bald assertion that

Mothers must have used overcharge information gleaned from LER’s


                              -13-
reviews as leverage to obtain better lease terms is insufficient

to withstand judgment as a matter of law.    The district court

therefore correctly granted Mothers summary judgment on LER’s

quid pro quo claims.

D.   Did Mothers have an implied duty to cooperate under the
     Contract?

     Next, LER contends that the district court erred in granting

summary judgment on its claim that Mothers violated an implied

duty in the Contract to cooperate.    Specifically, LER asserts

that after it made initial contact with thirteen landlords,

pursuant to Mothers’s approval, these landlords refused to

negotiate with LER in the absence of a letter on Mothers

letterhead confirming that LER was authorized to act on Mothers’s

behalf.   LER made several requests, both oral and written, to at

least three different Mothers employees for such letters.    LER

contends that Mothers employees repeatedly informed LER that they

wished LER to continue its work pursuant to the Contract and that

the necessary authorization letters would be forthcoming.

Because it never received the letters, LER alleges that it was

unable to recover discovered overcharges with respect to those

thirteen stores and was thus denied compensation under the

Contract.

     The court predicated its grant of summary judgment on this

claim upon the language of the Contract, which it interpreted as


                               -14-
unambiguously giving Mothers the authority to withhold its

cooperation.    The court referred to Article 1, Section 1.1, which

proceeds as follows:

          1.1 Services. Concerning all sixty-three (63) leases,
          Client hereby employs LER to review the leases and the
          terms thereof and certain books and records relating to
          the Charges, and collect overpaid Charges from the
          landlords, if any. LER is fully authorized to
          negotiate a settlement thereof; but it is distinctly
          understood that no settlement shall be made by LER
          without the approval of Client, and Client hereby
          agrees to make no settlement or offer of settlement
          without the consent of LER. LER may determine the
          order of review of the sixty-three (63) leases. Prior
          to LER contacting any landlord, Client shall approve
          all potential contact and action by LER, it being
          understood that LER shall have no right to sue the
          landlord or otherwise harass the landlord, without
          Client’s express written instructions. (emphasis
          added).


     Relying on Bank One, Texas, N.A. v. Stewart, 

,

434 (Tex. Ct. App. 1998), the district court adopted the

magistrate judge’s finding that “under Texas law, implied

covenants are disfavored and grafted onto contracts, ‘only if

necessary to effectuate the intention of the parties as disclosed

by the contract as a whole, but not to make the contract fair,

wise or just...[and] [t]here can be no implied covenant as to a

matter specifically covered by the written terms of the

contract.’”    We disagree, however, with the district court’s

application of this rule of law.    It appears to us that the above

portion of the Contract does not address the question of

cooperation as clearly as the court presumed.    Section 1.1 states

                                -15-
that “LER is fully authorized to negotiate a settlement

[regarding overpaid Charges].”    The section requires LER to

receive the approval of Mothers prior to (1) posing an offer of

settlement to a landlord; (2) contacting a landlord; or (3) suing

or harassing a landlord.   Mothers’s failure to provide

authorization letters, an assertion that it does not dispute,

does not constitute a valid exercise of its right to approve or

disapprove contact between LER and a landlord.    Nor can Mothers

legitimately claim that it withheld the authorization letters

because of a fear that simply confirming LER’s authority to

negotiate would disrupt its relationships with its landlords.

Otherwise, it would not have contractually granted LER the

authority to negotiate on its behalf in the first place.      In

failing to supply the needed authorization, Mothers did not

merely determine that a good relationship with a particular

landlord superceded recovering overcharges by vetoing a

particular contact.   Instead, it ended negotiations altogether

with thirteen landlords, and thus made it impossible for LER to

perform under the Contract.   A duty on the part of Mothers to

cooperate by providing LER with authorization letters was so

clearly in the contemplation of the parties that they deemed it

unnecessary to immortalize it in the contract.    A duty to

cooperate must necessarily be implied to enable LER to negotiate

pursuant to the limited powers granted to it in the Contract.



                                 -16-
     There is ample support in the case law for implying a duty

to cooperate in the circumstances of this case.    This court held

in Citizens Nat’l Bank of Orlando v. Vitt, that:

           ‘in every contract between a contractor and a
           subcontractor, an implied promise exists on the part of
           the contractor that he will do nothing to prevent,
           interfere or hinder the subcontractor in his
           performance or increase the cost thereof’...[w]henever
           the cooperation of a promisee is necessary for the
           performance of a contract, there is an implied
           condition of the contract that the cooperation will be
           given.

, 544-45 (5th Cir. 1966)(citations omitted).     The

relationship between LER and Mothers can be analogized to that of

a contractor and a subcontractor, or that of any other principal

and agent.    Similarly, in Levine v. Bayne, Snell & Krause, Ltd.,

Justice Owens, in her concurrence, noted that a client may be

subject to an implied covenant to cooperate with the attorney

whom he hired on a contingency basis.   

, 99 (Tex.

2000).   Perhaps most analogously, in an unpublished opinion a

Texas Court of Appeals affirmed a trial court’s judgment against

a homeowner for violating an implied duty to cooperate in a

contract conveying the plaintiff an option to purchase the

defendant’s home.    Elliott v. Lewis, 

(Tex. Ct.

App. 1994).   The defendant homeowner had refused to sell her home

to the plaintiff after the expiration of the option.   The

plaintiffs had been unable to arrange financing before the option

expired, and the court held that the defendant had a duty to


                                -17-
cooperate with their attempts to obtain financing within the

option period.   

court had instructed the jury that

“whenever cooperation is necessary for performance of a contract,

there is an implied condition of contract that cooperation will

be given.”   

     We therefore find that the district court erred in granting

summary judgment to Mothers as a matter of law on LER’s breach of

an implied duty to cooperate claim.    Neither the rule of law in

this jurisdiction or the terms of the Contract bar the court from

finding an implied duty to cooperate, and LER has presented

sufficient evidence to raise a genuine issue of fact as to

whether this duty was breached.   The grant of summary judgment is

therefore vacated, and we remand the claim to the district court

for trial.

E.   Can LER recover in quantum meruit?

     LER claims that the district court erred in dismissing its

request for relief in quantum meruit.   Quantum meruit is an

equitable theory which permits a “right to recover...based upon a

promise implied by law to pay for beneficial services rendered


     3
      But c.f. Bank 

(refusing to imply
that a bank has a duty to cooperate with its client when the
parties specifically contracted the extent of their bailment
relationship; Chapman Children’s Trust v. Porter & Hedges,
L.L.P., 

(Tex. Ct. App. 2000) (declining to imply a
duty to cooperate on the grounds that the parties purposefully
determined during the course of negotiations not to subject the
defendant to an express contractual duty to cooperate).

                                -18-
and knowingly accepted.”     Black Lake Pipeline v. Union Const.

Co., Inc., 

, 86 (Tex. 1976).    “As a general rule, a

plaintiff who seeks to recover the reasonable value of services

rendered or materials supplied will be permitted to recover in

quantum meruit only when there is no express contract covering

those services or materials.”     Black Lake 

.   See Jhaver v. Zapata Off-Shore Co., 

, 385 (5th

Cir. 1990).

      A review of the Contract reveals that the terms of LER’s

compensation was indeed dealt with under the Compensation

Provision of the Contract.    The mere fact that the Contract does

not particularly address LER’s out-of-pocket expenses does not

imply that such expenses fall beyond the scope of the Contract,

as LER contends, because the services for which the out-of-pocket

expenses were incurred were covered by the Contract.     Had the

parties contemplated that LER would be reimbursed for its out-of-

pocket expenses, such compensation would have been included in

the Compensation Provision.    Instead, the parties intentionally

structured the Contract as a contingency fee arrangement, whereby

LER would risk its out-of-pocket expenses for the promise of a

fifty percent interest in any recovered overcharge.

      There is, however, a clear exception to the general rule

which LER may take advantage of if it successfully demonstrates

at trial that Mothers breached an implied duty to cooperate.       In

                                 -19-
1988, the Texas Supreme Court held that "recovery in quantum

meruit is allowed when a plaintiff has partially performed an

express contract but, because of the defendant's breach, the

plaintiff is prevented from completing the contract."    Truly v.

Austin, 

, 936 (Tex. 1988)(emphasis in original).

See McFarland v. Sanders, 

, 646 (Tex. Ct. App.

1996).   If Mothers violated the duty to cooperate implied in the

Contract, then LER was unable to recover any potential

overcharges on Mothers’s behalf because Mothers breached the

contract.   We must therefore also vacate the district court’s

grant of summary judgment for Mothers on LER’s claim that it is

entitled to recover in quantum meruit insofar as it relates to

LER’s implied duty to cooperate claim.4


     4
      LER did not challenge on appeal the district court’s
determination that the benefit-of-the-bargain damages that it
claimed were the result of Mothers’s non-cooperation were too
speculative to be given credence. Failure to raise an issue on
appeal constitutes a waiver of that argument, and thus LER may
not recover expectation damages if it prevails on its duty to
cooperate claim. See United States v. Thibodeaux, 

,
912 (5th Cir. 2000); Yohey v. Collins, 

, 224-25 (5th
Cir.1993). However, LER did dispute the district court’s
conclusion that it had failed to include damages in the form of
out-of-pocket expenses in its pleadings or in its response to
Mothers’s motion for summary judgment. Because LER did indeed
assert out-of-pocket damages in its “Appendix to Plaintiff’s
Response to Defendants’ Motion For Summary Judgment,” this
finding of the district court was clearly erroneous. LER may
thus seek to recover the value of its time and the out-of-pocket
expenses it incurred in investigating the billing practices of
the thirteen stores for whom an authorization letter was
requested but never received. See McFarland v. Sanders, 

, 645-46 (Tex. Ct. App. 1996).

                               -20-
                        IV.   Conspiracy Claim

       LER asserts that the district court erred in granting

summary judgment to Mothers on LER’s claim that Mothers conspired

with its counsel, Graham Miles, to enter secret “side deals” with

its landlords in an attempt to avoid compensating LER under the

Contract.    The district court concluded that LER had waived this

argument by failing to present evidence of a “Miles conspiracy”

to the magistrate judge, and in the alternative, had failed to

create a genuine issue of material fact as to the existence of a

conspiracy.

       We agree with the district court that LER’s allegations

regarding a “Miles conspiracy” were legally insufficient.      First,

a conspiracy to breach a contract is not actionable under Texas

law.    Grizzle v. Texas Comm. Bank, 

, 285 (Tex. Ct.

App. 2001), pet. granted on other grounds, 45 Tex. S. Ct. J. 358

(Feb. 9, 2002).    LER, however, has not alleged that Miles

conspired with Mothers to commit any tort, nor did it appeal the

district court’s dismissal of its tort claims as a matter of law.

See Carmon v. Lubrizol Corp., 

, 794 (5th Cir.

1994)(“[I]ssues not raised at all [on appeal] are waived.”).

       Second, it is established that a corporation cannot conspire

with itself, no matter how many of its agents participated in the

wrongful action.    13 Tex. Jr. 3d Civil Conspiracy § 3.   Graham

Miles, as Mothers’s lawyer, is an agent.     See Restatement (2d) of

                                 -21-
Agency §§ 1,2.   LER has not alleged that Miles has any

independent interest that would make it possible for him, under

Texas law, to conspire with Mothers.    The district court

therefore properly granted Mothers summary judgment on this

claim.

                          V.   Rule 60 Claim

     LER alleges that Mothers improperly withheld documents at

the summary judgment stage, thereby denying LER of procedural and

substantive due process and requiring that summary judgment be

vacated.   In support of its contention, LER points to Mothers’s

belated production of documents at trial, and alleges that by

implication, Mothers probably withheld documents at the summary

judgment stage as well.

     LER’s claim is properly styled as one to set aside the

district court’s grants of summary judgment pursuant to Fed. R.

Civ. P. 60(b)(3).   Rule 60(b)(3) reads: “...On motion and upon

such terms as are just, the court may relieve a party or a

party’s legal representative from a final judgment...for the

following reasons...(3) fraud,...misrepresentation, or other

misconduct of an adverse party;....”    LER, however, does not deny

that it failed to file a 60(b)(3) motion in the district court.

Instead, it contends that its motion for sanctions regarding the

production of documents at the trial stage can be construed also

as a motion to set aside summary judgment.

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     The broadest reading of LER’s motion for sanctions does not

permit us to construe it as a motion to set aside summary

judgment.   LER’s Rule 60(b)(3) motion is therefore not properly

before this court.   City of Waco, Texas v. Bridges, 

,

227 (5th Cir. 1983) (“As a general rule, an appellate court will

not consider a new issue raised for the first time on appeal for

the purpose of reversing the lower court’s judgment.”).

Exceptions are made typically only in exceptional circumstances.

LER has not attempted to explain its failure to make this motion

to the district court.   The trial court is the forum charged with

the duty of determining questions of fact, and fairness requires

that the motion be sent back to the district court in order to

permit Mothers to present evidence to rebut LER’s assertions.

See Wilson v. Johns-Malville Sales Corp., 

, 871

(1989).

                          VI.   Conclusion

     We conclude that the district court improperly granted

Mothers summary judgment regarding LER’s claim that Mothers

breached an implied duty to cooperate.   The district court’s

dismissal of LER’s claim for recovery in quantum meruit was also

erroneous, insofar as it precludes LER from recovering its out-

of-pocket expenses in the event that it is able to prove that

Mothers breached an implied duty to cooperate at trial.   Those

judgments are therefore VACATED and the claims REMANDED to the


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district court for further proceedings.   The district court’s

judgments regarding all other claims are AFFIRMED.




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